Active Stocks
Fri Sep 22 2023 15:58:38
  1. Tata Steel share price
  2. 126.7 -0.86%
  1. HDFC Bank share price
  2. 1,529.2 -1.57%
  1. State Bank Of India share price
  2. 598.1 1.67%
  1. Power Grid Corporation Of India share price
  2. 199.1 -1.34%
  1. Tata Motors share price
  2. 621.1 -0.93%
Business News/ Companies / News/  Govt to own 35.8% in Vodafone Idea after conversion of AGR dues into equity

Vodafone Idea on Tuesday informed that the board at its meeting held on Monday has approved the conversion of the full amount of interest related to spectrum auction instalments and Adjusted Gross Revenue (AGR) Dues into equity. The conversion will therefore result in dilution to all the existing shareholders of the company, including the promoters.

Shares of Vodafone Idea were trading over 16% lower to 12 apiece on the BSE in Tuesday's opening deals.

Following the conversion, the Indian government will hold about 35.8% of the total outstanding shares of the company, and the promoter shareholders Vodafone Group would hold around 28.5% and Aditya Birla Group around 17.8%, the telecom operator announced in an exchange filing today. 

"The Net Present Value (NPV) of this interest is expected to be about 16,000 crore as per the company’s best estimates, subject to confirmation by the DoT. Since the average price of the company’s shares at the relevant date of 14.08.2021 was below par value, the equity shares will be issued to the government at par value of 10 per share, subject to final confirmation by the DoT," the statement added.

The Department of Telecommunications (DoT) had provided various options to the company in connection with Telecom Reforms Package, after which Vodafone Idea's board in October had approved deferring payment of spectrum auction installments & AGR dues by 4 years.

This rescue plan was crucial for Vodafone Idea, which has been losing customers to bigger rivals, especially after Reliance Jio sparked a brutal price war in 2016, and quickly clinched market share to become the top player.

The conversion of accrued interest into equity can be done by invoking Section 62 (4) of the Companies Act, and the amount will be treated as a loan until the conversion is completed, the DoT said in reforms announced in September last year.

Earlier this month, telecom major Bharti Airtel had informed that it will not avail the option of conversion of the interest on deferred spectrum and AGR dues into equity, under the reforms package.


"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Updated: 11 Jan 2022, 10:10 AM IST
Next Story
Recommended For You
Switch to the Mint app for fast and personalized news - Get App